Products becoming too complicated for Life insurance customers

Wednesday, September 8, 2010

According to a new statement by insurers LV=, companies offering products within the UK Protection market have forgotten the needs of their customers, making their products far too complicated for consumers to fully understand. The statement was issued by Mark Jones, the head of protection at LV=. The announcement came following news that LV= has enjoyed an increase in protection business of almost forty percent over the past six months of the year.

Jones stated that he is keen for LV= to simplify their suite of products, in order to make them more customer-focussed and easier to understand. He has suggested that Life insurance products, among others, have become too convoluted and need to be addressed in order to retain existing customers and attract new ones.

He commented: "It’s one of those products I think you can simplify without dumbing down certain areas. Sometimes we've added something because it makes it easier for us to look after the risk element and have forgotten that the more complicated we make it the less likely any consumer is going to engage with it, or that any adviser is going to be able to take someone down the journey to fulfill the customer's need. As we get better at risk management we can make a better offering to that market and not necessarily assume that the most comprehensive product is always the best for everybody.”

Jones also commented on the recent mergers, acquisitions and other activities across the UK Protection market that have complicated the industry, making it even more complex for customers. However, he stressed that this does not necessarily mean that the market is experiencing problems: “A lot of what see is always seen in dynamic mature market.”

“It's just been amplified in this case because of what's happened in mortgage market. A lot of companies probably have a fixed level of costs so that's bound to focus the mind and ask ‘is this the sort of market we want to be involved in going forward?' It will be interesting to see who the winners and losers are but I'm reasonably confident that we will be one of the winners in the protection space.”